SaaS multiples just broke 7.0x

09/29/2017By Sammy Abdullah, CFA

We monitor the revenue multiples of publicly traded SaaS companies closely, using these revenue multiples to drive our view on valuation. Although one could argue it’s not optimal to use public companies to determine valuation on Series A+ companies (it’s not), in our view public market multiples are the only honest and transparent data. Looking at M&A or the fundraising of peers is subject to too much selection bias (no one reports M&A or raises that weren’t spectacular) and outright exaggeration (when they do report it, they lie).

Recently, public SaaS companies hit a new milestone they haven’t seen in a long time: the median and average revenue multiple is now ~7.0x. Specifically, the average is 7.07x and median is 6.91x for the 74 publicly traded SaaS companies we follow. The data is below.

TTM

TTM

TTM

Market

Q2 2017

Q1 2017

Q4 2016

Q3 2016

Q2 2016

Q1 2016

Name

Ticker

Revenue

EBITDA

FCF

Cap

Debt

Cash

EV Calc

EV/Rev

EV/Rev

EV/Rev

EV/Rev

EV/Rev

EV/Rev

2U

TWOU

$239

-$20

-$14

$2,840

$15

$37

$2,818

11.78x

10.31x

8.59x

6.43x

8.91x

6.52x

Athenahealth, Inc.

ATHN

$1,150

$128

$169

$4,950

$280

$71

$5,159

4.49x

5.04x

4.29x

4.23x

5.07x

5.26x

Bazaarvoice, Inc.

BV

$203

-$3

$15

$400

$27

$85

$343

1.69x

1.69x

1.52x

1.77x

2.26x

1.27x

Benefitfocus, Inc.

BNFT

$248

-$6

-$9

$973

$112

$59

$1,026

4.13x

4.87x

3.84x

4.03x

5.54x

5.34x

Box, Inc.

BOX

$453

-$118

$7

$2,870

$83

$165

$2,788

6.16x

5.87x

5.04x

5.05x

5.27x

4.39x

BroadSoft, Inc.

BSFT

$355

$24

$60

$1,550

$208

$368

$1,390

3.92x

3.61x

3.38x

3.68x

4.21x

4.10x

Castlight Health, Inc.

CSLT

$115

-$49

-$26

$545

$6

$96

$454

3.94x

4.17x

2.97x

4.26x

3.47x

3.54x

Cornerstone OnDemand, Inc.

CSOD

$445

-$45

$41

$2,300

$243

$310

$2,233

5.02x

5.17x

4.86x

5.75x

6.51x

5.58x

Five9, Inc.

FIVN

$180

$2

$5

$1,210

$46

$57

$1,199

6.66x

7.01x

5.58x

4.80x

5.58x

3.67x

Hortonworks, Inc.

HDP

$217

-$223

-$53

$1,140

$0

$72

$1,068

4.92x

3.89x

3.17x

2.62x

2.49x

3.85x

HubSpot, Inc.

HUBS

$318

-$35

$35

$2,760

$290

$492

$2,557

8.04x

8.59x

7.55x

6.41x

8.56x

7.32x

IntraLinks Holdings, Inc.

IL

---

---

---

---

---

---

---

---

---

---

---

2.78x

2.17x

1.72x

Jive Software, Inc.

JIVE

---

---

---

---

---

---

---

---

---

---

1.16x

1.19x

1.12x

0.93x

Lifelock

LOCK

---

---

---

---

---

---

---

---

---

---

---

3.24x

2.24x

1.66x

LivePerson Inc.

LPSN

$216

$8

$15

$816

$0

$54

$761

3.53x

3.43x

1.56x

1.68x

1.86x

1.47x

LogMeIN, Inc.

LOGM

$618

$128

$221

$5,860

$0

$286

$5,575

9.03x

9.48x

15.22x

7.16x

6.83x

4.64x

Marin Software, Inc.

MRIN

$86

-$12

$2

$77

$3

$33

$48

0.55x

0.17x

0.45x

0.56x

0.59x

0.47x

MobileIron, Inc.

MOBL

$172

-$50

-$1

$329

$0

$89

$240

1.40x

1.92x

1.80x

1.66x

2.03x

1.03x

New Relic, Inc.

NEWR

$285

-$47

$33

$2,620

$0

$227

$2,393

8.40x

8.93x

7.77x

6.09x

8.69x

6.56x

Proofpoint, Inc.

PFPT

$442

-$33

$135

$4,020

$378

$429

$3,968

8.97x

8.36x

8.44x

8.93x

9.85x

8.10x

Qualys, Inc.

QLYS

$212

$52

$83

$1,940

$0

$279

$1,661

7.85x

6.08x

5.54x

5.00x

6.25x

4.99x

RealPage, Inc.

RP

$611

$91

$156

$3,300

$396

$325

$3,371

5.52x

5.50x

5.12x

4.52x

4.16x

3.67x

RingCentral, Inc.

RNG

$433

-$13

$32

$3,050

$0

$167

$2,883

6.66x

6.10x

4.99x

4.00x

4.72x

4.00x

salesforce.com, Inc.

CRM

$9,390

$464

$2,420

$68,230

$2,580

$3,500

$67,310

7.17x

0.65x

7.18x

6.22x

6.65x

8.03x

ServiceNow, Inc.

NOW

$1,630

-$32

$546

$19,770

$1,140

$1,690

$19,220

11.79x

0.81x

10.38x

9.50x

10.68x

10.09x

Splunk, Inc.

SPLK

$1,070

-$284

$212

$9,730

$81

$1,080

$8,731

8.16x

7.24x

7.64x

7.15x

8.66x

9.26x

SPS Commerce, Inc.

SPSC

$207

$23

$28

$964

$0

$159

$806

3.90x

4.04x

4.51x

5.71x

6.39x

4.66x

The Ultimate Software Group, Inc.

ULTI

$861

$62

$183

$5,520

$10

$111

$5,419

6.30x

8.08x

7.36x

7.15x

8.32x

8.55x

Veeva Systems Inc.

VEEV

$617

$155

$223

$7,830

$0

$725

$7,105

11.51x

14.18x

12.02x

10.15x

10.88x

9.37x

Wix.com Ltd.

WIX

$336

-$39

$66

$3,110

$1

$185

$2,926

8.71x

7.32x

10.61x

6.72x

7.11x

4.25x

WorkDay, Inc.

WDAY

$1,850

-$230

$374

$21,610

$548

$2,100

$20,058

10.84x

11.47x

0.12x

8.46x

12.37x

11.95x

Zendesk, Inc.

ZEN

$364

-$87

$37

$2,820

$0

$240

$2,580

7.09x

7.88x

7.74x

6.64x

10.18x

8.36x

Secureworks

SCWX

$456

-$25

$6

$1,020

$0

$98

$922

2.02x

1.79x

1.41x

1.83x

2.27x

3.37x

Appfolio, Inc.

APPF

$124

$5

$21

$1,570

$0

$32

$1,538

12.39x

10.15x

8.00x

7.73x

7.01x

5.43x

Atlassian Corporation

TEAM

$620

-$16

$199

$7,990

$0

$550

$7,440

12.00x

12.13x

11.62x

9.48x

12.55x

9.65x

Twilio

TWLO

$337

-$35

$1

$2,830

$0

$289

$2,541

7.55x

7.70x

7.73x

8.34x

23.42x

---

Instructure

INST

$134

-$47

-$33

$965

$0

$26

$939

7.03x

7.37x

5.31x

4.71x

7.06x

5.28x

Mindbody, Inc

MB

$160

-$9

$4

$1,250

$15

$224

$1,041

6.52x

6.21x

7.26x

6.25x

5.91x

4.06x

Shopify

SHOP

$509

-$34

$3

$11,910

$0

$932

$10,978

21.57x

19.60x

14.57x

10.36x

12.58x

9.40x

Xactly

XTLY

---

---

---

---

---

---

---

---

---

4.88x

3.50x

3.44x

4.85x

3.39x

Nutanix

NTNX

$846

-$310

$0

$3,710

$0

$349

$3,361

3.97x

3.25x

3.80x

6.48x

---

---

Apptio

APTI

$174

-$22

-$1

$696

-$1

$124

$571

3.28x

3.54x

2.22x

---

---

---

Blackline

BL

$148

-$13

-$2

$1,760

$0

$107

$1,653

11.14x

13.97x

11.58x

---

---

---

Coupa Software

COUP

$159

-$34

$3

$1,680

$0

$208

$1,472

9.25x

9.51x

7.76x

---

---

---

Okta

OKTA

$205

-$92

-$31

$2,810

$0

$213

$2,597

12.66x

10.28x

---

---

---

---

Alarm.com

ALRM

$298

$47

$34

$2,090

$73

$69

$2,094

7.03x

6.41x

---

---

---

---

Alteryx Inc

AYX

$106

-$21

$4

$1,130

$0

$153

$977

9.19x

10.58x

---

---

---

---

Amber Road

AMBR

$76

-$11

-$2

$204

$23

$11

$216

2.83x

3.52x

---

---

---

---

Appian Corporation

APPN

$146

-$26

-$1

$1,380

$0

$78

$1,302

8.92x

8.54x

---

---

---

---

Blackbaud

BLKB

$757

$132

$159

$3,990

$388

$18

$4,360

5.76x

6.27x

---

---

---

---

Callidus Software

CALD

$228

-$8

$31

$1,680

$0

$172

$1,508

6.61x

6.45x

---

---

---

---

Channel Advisors

ECOM

$118

-$5

$5

$295

$1

$58

$238

2.01x

1.85x

---

---

---

---

Cloudera

CLDR

$310

-$360

-$82

$2,220

$0

$395

$1,825

5.90x

7.21x

---

---

---

---

Ebix

EBIX

$321

$114

$84

$1,940

$326

$81

$2,185

6.80x

6.55x

---

---

---

---

Ellie Mae

ELLI

$394

$82

$114

$2,950

$0

$334

$2,617

6.65x

6.70x

---

---

---

---

Everbridge Inc

EVBG

$89

-$11

$9

$712

$0

$45

$667

7.49x

7.50x

---

---

---

---

FireEye

FEYE

$730

-$161

-$7

$3,070

$761

$871

$2,960

4.05x

3.45x

---

---

---

---

HealthStream

HSTM

$238

$24

$47

$752

$0

$116

$637

2.67x

2.67x

---

---

---

---

J2 Global

JCOM

$990

$384

$262

$3,570

$1,240

$331

$4,479

4.53x

5.08x

---

---

---

---

Kinaxis

KXSCF

$126

$22

$33

$1,510

$0

$150

$1,360

10.83x

11.18x

---

---

---

---

Medidata Solutions

MDSO

$509

$77

$106

$4,650

$271

$367

$4,554

8.95x

8.60x

---

---

---

---

Mimecast

MIME

$203

$5

$35

$1,630

$14

$112

$1,532

7.54x

7.88x

---

---

---

---

Mulesoft

MULE

$235

-$54

$1

$2,570

$0

$256

$2,314

9.85x

10.92x

---

---

---

---

NantHealth

NH

$98

-$116

-$84

$490

$193

$93

$590

6.01x

5.68x

---

---

---

---

Paycom Software

PAYC

$383

$74

$100

$4,490

$35

$68

$4,457

11.64x

11.46x

---

---

---

---

Paylocity Holding

PCTY

$300

$19

$62

$2,440

$0

$103

$2,337

7.79x

7.89x

---

---

---

---

Q2 Holdings

QTWO

$173

-$17

-$4

$1,680

$0

$79

$1,601

9.28x

9.43x

---

---

---

---

Tabula Rasa Healthcare

TRHC

$109

$2

$7

$498

$1

$3

$497

4.56x

2.63x

---

---

---

---

Talend

TLND

$126

-$25

$5

$1,140

$0

$95

$1,045

8.26x

8.57x

---

---

---

---

The Trade Desk

TTD

$252

$64

$40

$2,360

$27

$116

$2,271

9.03x

9.65x

---

---

---

---

Upland Software

UPLD

$83

$9

$9

$438

$72

$57

$453

5.48x

6.90x

---

---

---

---

Workiva

WK

$192

-$32

$19

$875

$20

$73

$823

4.28x

4.10x

---

---

---

---

Yext

YEXT

$145

-$52

-$23

$1,190

$0

$127

$1,063

7.31x

7.42x

---

---

---

---

Zix

ZIXI

$63

$14

$15

$274

$0

$30

$244

3.86x

4.32x

---

---

---

---

Adobe Systems Inc

ADBE

$6,530

$2,140

$2,590

$72,530

$1,890

$4,930

$69,490

10.64x

---

---

---

---

---

Microsoft Corp

MSFT

$89,950

$30,430

$39,510

$570,540

$88,800

$129,210

$530,130

5.89x

---

---

---

---

---

Mongo DB

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

Average

$1,826

$443

$670

$12,731

$1,397

$2,156

$11,972

7.07x

6.78x

6.08x

5.42x

6.63x

5.26x

Median

$250

-$11

$20

$2,015

$1

$139

$1,960

6.91x

6.70x

5.43x

5.71x

6.32x

4.66x

Although the table below goes back to Q1 2016, frankly we haven’t seen multiples this rich since before 2008. Now that multiples are at a 10+ year high, it’s a great time to raise money or sell your business if you’ve been considering it.